Money doesn’t grow on trees, in fact it doesn’t grow at all. To a child money doesn’t really exist, its magic!
Let me give you an example, you are a 5 year old and you’ve just seen something you want. You ask your Mum if you can have it, if she’s in the right mood she opens her magic wallet and produces a small thin object (the credit card) and points it at another slightly larger object (the paypass machine), the woman behind the counter says ‘Thank you, have a great day’. Your mum then turns to you, hands you what you were so eager to have and you walk out of the store.
How can we expect children to believe anything other than the obvious fact that you are a magician.
Ok back to being a child – you slowly begin to grow and one of your next interactions with money is in the form of a super fun mystical envelope that magically appears in the letterbox and brings money that smells like mothballs – hooray more lego and lollies and i still have no clue where or how this came to me, but i like it.
Skip ahead a few years and in comes the tooth fairy, so mystical and so magical that no one’s ever seen her and she’s never met you but low and behold she wants to give you more money! As a child, you don’t want to question how you came to have a Magic parents, a bewitched letterbox and a mystical fairy handing out what seems to be the magic item that gets you everything your heart desires, so you don?t.
Let’s break this down – by the time your child is 10 we’ve created a world in which they either can or can’t have something and the decision is solely place on the tall magician called mum (which can cause some issues as early as a child can throw a tantrum).
One way to avoid a world where your child sees money as a magic object that is always at the ready is to bring in something called a 50/50 split as early as age 5. The 50/50 split works like this:
Your child actively seeks out a job they could do around the house (let them come up with the job)
They then negotiate a price with you for doing that job e.g. 50c for cleaning their 3 year old brothers room
They complete the job
Then the 50c is split 50/50 – 50% goes to a savings account (this should be held long term and given back to the child at a particular age of your choosing) and the other 50% goes to them directly (to do whatever they want (within reason), save for something special, use at the zoo or go to a movie).
The idea is that the child now understands the work that went into earning that amount of money, you get to discuss savings and they’ve shown themselves that they need no one else other than themselves to produce this ‘money’ thing (they also quickly figure out that none of it is magic).
p.s. Children should always have chores – this is their commitment to being a part of the family. Make sure you aren’t paying your child to be a part of the family otherwise if the payments ever stop you’ll have a couple of scary kids chasing you down annnnd we all know the worst horror movies involve scary children.
Written by Jarrad Dober, CEO of Kids entrepreneurial company One Acorn.